More trouble for Rio Tinto in China

The new accusations against RTP claim overcharging for its iron ore in what is now being called an "editorial piece" on a Chinese government Internet site. The National Administration for Protection of State Secrets (yes, that is really the name) stated that the piece did not reflect official policy.

Nevertheless, why was it published on the front page and given such attention? The government will contend that it was a mistake, but considering that RTP and China have a strained relationship, I have to wonder exactly how much of a mistake it truly was. In fact, with the Chinese government claiming that it has been seriously damaged by RTP's practice, I have to question any "accidental" press release or report. The "accidental" editorial claims that RTP overcharged the government up to $102 billion in the past six years.

Gotta love a good controversy, especially when it comes down to a 'they said-they said situation' between a company and a country. This controversy is not going to go away, especially with allegations of impropriety leveled by the Chinese government.

Of course, all of this has taken place on the heels of RTP's decision in June to not sell part of itself to Aluminum Corporation of China (Chinalco). This investment would have been the largest foreign investment by a Chinese company, but it was not to be. Since then, it sure seems as if the Chinese government has tried to blame anyone possible except for themselves for the deal falling apart.